Bitcoin, Ether, Coinbase Fall After CFTC Sues Binance
Bitcoin and crypto-related stocks fell after the CFTC sued crypto exchange Binance on Monday. Photo illustration by Josue Evilla – Fortune; original photos by Getty Images
The Commodity Futures Trading Commission sent prices of crypto-related stocks and the most popular cryptocurrencies plummeting on Monday after it announced it was suing Binance and its CEO, Changpeng “CZ” Zhao, in federal court.
Bitcoin and Ether, the two leading cryptocurrencies, fell by about 3% each in the past 24 hours, a change from the steady rise seen in recent days that saw each hit a months-long high. The cryptocurrency BNB, which powers Binance’s BNB chain, was down more than 6%.
Many crypto-related stocks fell even more.
Shares of rival crypto exchange Coinbase fell just over 10% following the news. The company has recently run into its own regulatory troubles, with the Securities and Exchange Commission issuing a Wells notice to the exchange related to “aspects of the company’s exchange, the staking service Coinbase Earn and Coinbase Wallet following a cursory investigation,” Coinbase said last week.
Shares of MicroStrategy, the Bitcoin “hodling” company founded by Michael Saylor, also fell more than 7% on Monday afternoon. In a tweet on Monday, Saylor said the company had repaid a $205 million loan to collapsed crypto bank Silvergate at a 22% discount. Saylor added that the company spent about $150 million on 6,455 more Bitcoin tokens to bring its total holdings to 138,955, worth about $3.7 billion at current prices.
MicroStrategy repaid the $205 million Silvergate loan at a 22% discount. From 23.03.23, $MSTR bought another ~6,455 bitcoins for ~$150M at an average of ~$23,238 per #bitcoin & held ~138,955 BTC bought for ~$4.14B at an average of ~$29,817 per bitcoin. https://t.co/ALp9VLkTpt
— Michael Saylor⚡️ (@saylor) March 27, 2023
The share price of the mining companies also fell. Marathon Digital Holdings fell more than 8%, while Colorado-based Riot Blockchain saw shares fall around 8%. Toronto-based crypto miner Hut 8 was down 6%.
The CFTC alleged in a 74-page complaint on Monday that the company “disregarded applicable federal laws while promoting Binance’s US customer base…” The agency alleges in the lawsuit that Binance failed to implement know-your-customer and anti-money laundering procedures of money. , helping US-based customers “avoid the compliance controls Binance purports to implement to prevent and detect violations of US law.”
In a Monday tweetZhao posted a message with only the number “4,” which he previously said was meant to ignore FUD, a popular Crypto Twitter acronym for fear, uncertainty, and doubt.
